2014 (6) TMI 878 - HC - VAT and Sales Tax

levy of tax on interState sale - Interpretation of interState sale - Held that - There is neither any interState sale nor the view taken can be perverse. The Tribunal in paragraph 11 of the order under challenge noted the admitted facts. Upon perusal of the record and assessment order the Tribunal found that the sales effected by the Appellant were not stray transactions. They were bulk sales and volume was more than 3, 00, 000/-per transaction. During crosschecking the stand of the Assessee was that the gold was a precious metal and high value commodity. The transportation is generally not followed and therefore delivery in most of the cases is personally taken. Yet the Tribunal found that the Assessing Authority confirmed by crosschecking the movement of the goods from Maharashtra to other states the invoices drawn and the other documents would demonstrate that all the goods moved out of the State and that the party is outside Maharashtra. - Tribunal s order cannot be said to be perverse. The Tribunal in the backdrop of the definition of interState sale has applied correct parameters in consonance with provisions of section 3 of the Central Sales Tax Act 1956. - no prejudice is caused to the Appellant we uphold the view of the Tribunal. The Tribunal has based its conclusion on the admitted facts and the tax invoice bills. These are admitted documents and based on which the conclusion is reached. It being a possible conclusion and warranting no interference in our appellate jurisdiction the appeals are dismissed - Decided against assessee.

Summary

Issues:
Challenge to Tribunal's order on VAT, liability to pay taxes on interState sale, application of Central Sales Tax Act 1956, interpretation of 'interState sale'.

Analysis:
The appeal challenges the Tribunal's order on VAT, contending that the transactions in question do not attract tax liability on interState sale. The Assessee's counsel argues that the deeming fiction under the Central Sales Tax Act 1956 applies only if the sale occasions movement of goods from one State to another. The counsel relies on judgments like Balabhagas Hulaschand and Saraswathi agencies to support the argument. However, the Court disagrees, stating that the Tribunal correctly found no interState sale based on admitted facts. The Tribunal noted that the sales were bulk transactions exceeding Rs. 3,00,000 per transaction, with goods moving from Maharashtra to other states. Despite arguments that the goods were sold at the shop's shelf and further dealt with by customers, the Tribunal found evidence of goods moving out of the State to known customers against payment, with representatives taking delivery. The Court upholds the Tribunal's decision, stating it aligns with the Central Sales Tax Act and established legal principles.

The Court references the Madras High Court's decision in Saraswathi Agencies, emphasizing that for a sale to be interState, it must involve movement of goods to a purchaser outside the State. If the movement is at the purchaser's instance and the dealer only delivers goods at their business place, it does not warrant Central Sales Tax. In this case, the Court finds that the goods moved out of the State to an entity outside, contradicting the Assessee's claim. The Tribunal's decision is based on admitted facts and tax invoices, leading to a possible conclusion without prejudice to the Appellant. As there is no interference warranted in appellate jurisdiction, the appeals are dismissed without costs.